• Interest on Employer Adjustments - Effective July 1, 2025, any employer adjustments for contributions owed in any DB system will now be assessed the actuarially assumed rate of return as interest on the amount owed. Our current actuarially assumed rate of return is 7.3%.
• Optional Elections - Effective July 1, 2025, if an employer fails to inform a new employee of their optional PERS election, the employee must be allowed to purchase retroactive service, and their employer must pay the employer contributions as well as accrued interest on both the employer and employee contributions.
• Retro Service Purchases - Effective July 1, 2026, for retroactive service purchases, we will no longer use Short-Term Investment Pool interest on the amount owed to complete the purchase, but rather our current assumed rate of return of 7.3%.

• Removes variable employer contribution rates for JRS, HPORS, SRS, and GWPORS.
• Sets new employer rates effective upon passage and approval for JRS, HPORS, SRS, and GWPORS:
  • JRS - 0%
  • HPORS - 38.33%
  • SRS - 13.115%
  • GWPORS - 10.56%
• Applies retroactively to employer contribution rates for pay dates on or after July 1, 2023. MPERA will be calculating the difference between the current employer contribution rates prior to the passage of HB 85, and the newly instituted employer contribution rates for the time period of July 1, 2024, through the date the Governor signs the bill.

• Increases the base monthly benefit in the VFCA for members who have completed 20 years of service and reached age 55, or members who are entitled to a partial benefit and have completed 10 years of service and reached age 60.
• A member receiving a partial benefit (age 60 with at least 10 years but less than 20 years) receives a partial benefit calculated by multiplying the full base benefit ($200) by a fraction where the numerator is the amount of years of service they have (less than 20), and the denominator being 20.
• The bill does not change benefit increase provisions for members who accrue more than 20 years of service:
  • A member's full pension benefit must be increased monthly by $7.50 for each completed year of active service in excess of 20 years, up to 30 total years of service.
  • In addition, a member who retires on or after July 1, 2011, will receive $7.50 per month for each additional year of credited service after 30 years, if the pension trust is actuarially sound and the amortization period for any unfunded liabilities remains 20 years or less.

Calculation Examples:

Full Benefit:

• Member is age 55 with 20 years of service = $200 monthly benefit
• Member is age 57 with 25 years of service = $237.50 monthly benefit ($200 + 5 x $7.50)

Partial Benefit:

• Member is age 61 with 13 years of service = $130 monthly benefit ($200 x 13/20)

• This bill moves the one workers' compensation judge in the state to the judicial branch, and allows participation in the JRS system. The current workers' compensation judge has until October 1, 2025, to make an irrevocable election to remain in PERS or join JRS. Thereafter, any new workers' compensation court judge appointed by the Governor must participate in JRS.

• Employer contribution increase in PERS of .1% for 20 continuous years beginning on July 1, 2027, (FY 2028), through June 30, 2047, (FY 2047); bringing the employer rate up to 2.0% by FY 2047.
• General fund appropriation of $250 million to the pension fund account within the Montana Growth and Opportunity Trust (MGOT) in FY 2025 with up to 25% of the pension fund balance available to be used to offset market volatility; (should the Retirement Board certify that our long-term inception to date -- July 1, 1994, to the present -- market rate of return as of June 30th in two consecutive fiscal years, is less than our actuarially assumed rate of return at that time).
• Includes two additional transfers to the pension fund account within the MGOT of $24.1 million in FY 2026 and $18.4 million in FY 2027.
• 80% of transfers into the reinvestment portion of the MGOT, and 50% of interest earnings from the distribution portion of the MGOT shall be allocated to the pension fund. There is a cap of $1 billion on the pension fund within the MGOT.

• Increases the employer contribution rate in PERS, GWPORS, HPORS, and SRS by .1% beginning July 1, 2025, (FY 2026), and continuing each year through July 1, 2034, (FY 2035), increasing the total employer rate in each system by 1.0% after 10 years has elapsed.

For SB 56, there is a contingent voidness clause in the bill that says if HB 924 is signed by the Governor than the .1% PERS increase starting in FY26 is void (because there would be a .1% for 20 years beginning in FY 2027 in HB 924). So, Bill will keep me posted on the status of HB 924 before we go live with this.

• Amends the definition of "dependent child" in HPORS, MPORS, and FURS to add accredited secondary school to the definition, so as to prevent a child of a fallen officer or firefighter from having their monthly benefit payment stop while they are attending high school after reaching the age of 18.
  • Historically, in each of these three systems under statute, if an active member passes away while employed or passes away after retirement without a spouse, their "dependent child" (as defined under 19-6-101, MCA for HPORS; 19-9-104, MCA for MPORS; and 19-13-104, MCA for FURS) will continue receiving their monthly benefit payment for a finite period of time.
  • Under current law, this period of time is defined under the definition of "dependent child" as the period of time in which a child is under the age of majority, (18 years of age in this context), or under 24 years of age and attending an accredited postsecondary educational institution as a full-time student in anticipation of receiving a certificate or degree.

• Creates a separate line-of-duty disability benefit statute in MPORS and FURS for members of each system injured in the line-of-duty, and who are determined to be permanently disabled and unable to perform their duties as a firefighter or municipal police officer.